HOW TO OVERCOME FINANCIAL WORRIES ABOUT FREELANCING

So, you want to go freelance or self employed, but you are worried about the financial stresses of not having that stable income? In this post I will share my tips on how to overcome these financial barriers, and get you prepared to take the plunge into quitting your 9-5!

SAVE A BUFFER

Build an emergency fund to cover at least three to six months' worth of living expenses. This fund acts as a financial safety net in case of unexpected expenses or a temporary decrease in income. I would recommend trying to save this fund before you go fully freelance, as it can take a little while to build up your client base. I also try to keep this fund topped up too.

KEEP YOUR COST OF LIVING DOWN

If you have the opportunity to work remotely, why not live somewhere where the cost of living is cheaper? I started my freelancing journey whilst living in Bali, as the cost of living there was much cheaper than in London for example. I have since worked from places like Sri Lanka [super cheap!] and remotely from my van [also much cheaper than bricks and mortar].

CHARGE THE RIGHT RATE

As freelancers we should be charging a higher day rate than employed people, because we don’t get employed benefits like holiday and sick pay and we have to buy all our own equipment. Working out your rate is tough, but speak to other freelancers in your nice and do some research online to see what is a good rate for your role and experience.

PICK THE RIGHT CLIENTS

I always try to have at least one client that pays enough monthly on a long-term basis to cover my living costs. This way I know that I can make the payments of the important stuff, and anything else I earn is a bonus!

ENSURE YOU HAVE A NOTICE PERIOD

You should have a contract in place with every client that you work with so that you have everything agreed in writing [about payment terms, scope of work, and the important one for this topic - your notice period. I try to have at least 30 days notice period with all my clients, because if they wish to terminate the contract it gives me adequate time to find an alternative client.

Diversify Income Streams

Consider diversifying your sources of income. This could involve taking on different types of freelance projects, offering additional services, or even exploring passive income opportunities.

Invoice Promptly

Send invoices promptly upon completing a project. Include clear payment instructions and follow up on overdue payments. Consider using invoicing tools that automate this process, like the LITT app - this app is going to change the game for the self employed, and it launches in a few weeks time!

make sure you have insurance

Make sure you have insurance which covers things like health insurance and professional liability insurance. This can protect you from times when you might not be able to work due to medical reasons for example, and it protects you for medical expenses or legal issues related to your work.

HAVE A PENSION

Save for retirement by contributing to pension - I have a direct debit set up paying my pension each month. And remember that you can always hold it if you are having a slow month.

By combining these financial management strategies with a proactive and adaptable mindset, you can enhance your financial stability as a freelancer!